Elliott Wave Outlook of Nifty for 29 Nov 2018 Expiry Week

| November 26, 2018

Nifty opened bit higher at 10612, bounced further to register high 10646 but failed to sustain at higher levels and declined by more than 130 points from day’s high to register day’s low 10512 and closed 73 points down at 10526.

Thursday, Nifty was in negative zone and was expected to decline further towards 10552-10501 with 10633 as breakeven point on upside.

Trading strategy was to Sell Nifty if get in 10610-10633 range using exact stoploss of 10641 expecting decline towards 10552-10501. Nifty achieved downward target range but after triggering the stoploss, 10641 was stoploss whereas Nifty registered high 10646. Now, let’s have a fresh look at latest charts for further scenario.

This analysis report is covering move after 6825 and earlier wave counts are explained in my last “All Time Frames” analysis report Fresh Elliott Wave Analysis of Nifty on All Time Frame dated 03 Jun 2018.

Elliott wave analysis of Nifty for Nov 2018 Expiry

Elliott wave analysis of Nifty for Nov 2018 Expiry

This is daily time bar chart of Nifty covering bounce after low 6825 which I marked as start of wave [V] on daily chart in my last “All Time Frames” Report. There is no major change in wave counts on this chart.

The last bounce from 9951-11760 looks like a 3 waves move and Nifty declined very sharply from 11760 without completing Impulse or ED Pattern. So, wave counts and personality of move is indicating the possibility of Irregular Correction at top.

So, may be inner wave ‘3’ of [v] is completed at 11171 and ‘4’ may be in progress as Irregular Correction with inner wave (A) of ‘4’ completed from 11171-9951 as Impulse, wave (B) may be completed from 9951-11760 as (abc) and wave (C) may be in progress.

Wave (C) of Irregular Correction normally completes at or after the end of wave (A) which is 9951. And 38% retracement of wave ‘3’ is placed at 9918. So, 9951-9918 is general expected range for completion of Irregular Correction in this case. Otherwise, wave (C) already achieved its minimum requirements and projections.

If Irregular Correction already completed at 10004 then Nifty must bounce straightway for new life time high in quick time.

So, let’s analyse the decline started from 11760 to check if wave (C) of Irregular Correction started from 11760 is already completed or not.

Elliott wave analysis of Nifty for Nov 2018 Expiry

Elliott wave analysis of Nifty for Nov 2018 Expiry

This is 5 hourly time bar chart of Nifty covering decline after 11760 which I am marked as start of wave (C) of Irregular Correction. Again, there is no major change in wave counts on this chart.

I am considering wave (C) of irregular correction is completed from 11760-10004 because the Reflex Point based on these wave counts is 10710 and first impulse from low 10004 is completed above 10710.

So, there is possibility for bigger reversal for new high but this move is very big of about 1700 points. So, we need to proceed step by step and must concentrate on the internal pattern of bounce (started from 10004) to make our trading decisions.

So, let’s have a separate look at bounce started from 10004 to identify further move.

 

This is 30 minutes time bar chart of Nifty covering bounce after 10004 which I am analyzing independently.

It seems wave (1) completed from 10004-10285 (pattern is not confident), wave (2) may be completed from 10285-10105, wave (3) may be completed from 10105-10645, wave (4) may be completed from 10645-10440 and wave (5) may be completed from 10440-10774. Overall, an Impulse seems completed from 10004-10774.

Minimum 23%-38% retracement of this whole impulse is placed at 10592-10479 and next 61% retracement is placed at 10279. Nifty already entered in minimum 10592-10479 range and if it manages to break below 10479 can decline further towards 10298.

Now, let’s analyse the decline started from 10774 separately to check its pattern and to calculate immediate levels.

This is 5 minutes time bar chart of Nifty covering decline started from 10774 which I am expecting as start of correction after completion of Impulse.

It seems wave (1) completed from 10774-10712, wave (2) may be completed from 10712-10738, wave (3) may completed from 10738-10562, wave (4) may be completed from 10562-10646 and wave (5) may be in either completed at 10512 or still in progress. Wave (4) retraced more than 38%.

Wave (5) achieved normal 61% projection after breaking below 10514 and next 100% projection is placed at 10434 which is a rare case. Wave (5) started from 10646 is extended, so we can expect a sharp bounce towards 10646 very soon.

This downward impulse started from 10774 can be marked as wave (a or 1). Normal 38%-61% retracement of progress of wave (a or 1) is placed at 10612-10673 (100-160 points from low).

So, wave (a or 1) can complete somewhere in 10512-10434 range, wave (b or 2) can complete somewhere in 10612-10673 range followed by decline of 250-300 points as wave (c or 3).

Conclusion

For Medium/Long Term: – There is no change in medium/long term outlook, the first Impulse from low 10004 bounced above Reflex Point 10710 which is indicating first sign of bigger reversal for new high above 11760. Now, Nifty can decline below 10004 only if the overall correction started from 11760 turns into Irregular/Complex Correction.

Wave (C) is very big, so we need to proceed step by step and must concentrate on the internal pattern of bounce started from 10004 to decide further trades.

For short term: – Nifty can give a minimum bounce of 100-161 points from 10512-10434 range followed by a decline of 250-300 points. This can be overall movement of Nifty in Nov expiry week.

On the other hand, wave (5) started from 10646 is already extended. So, there is a possibility of sharp bounce towards 10646 without breaking lower below 10434.

Any change in wave counts or pattern or outlook will be updated in daily analysis report. We need to keep all these conditions in mind while deciding next trade.

Trading Points of View:

Nifty is already in corrective wave started from 10774 and we are expecting wave (b or 2) within this corrective, thus we are going to enter in lower degree corrective wave within higher corrective. So, it is very difficult to decide an advance trade because corrective waves are consist of zigzag moves and it needs continuous observation.

Only Intraday or Swing Trades are safe in such conditions and these trades can be decided during market hours only.

Generally, Nifty can first bounce by 100-161 points from 10512-10434 range without breaking below 10434 and then fall by 250-300 points after this expected bounce. We can expect up-down swings in coming week.

So, traders can plan their own trade based on the conditions explained above. I will try to catch the fall of 250-300 points if Nifty forms upside corrective pattern as I am expecting because this fall is going to be impulsive.

But yes, extended wave (5) started from 10646 is indicating a sharp bounce towards 10646 very soon. So, small risk can be taken by buying 10600 Call of Nov/Dec Expiry in light quantity if get Nifty in 10480-10434 range using stoploss below 10434.

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Category: Nifty

About the Author ()

Deepak Kumar is an independent Technical Analyst, regular practitioner and Trainer of Elliott wave theory applying Elliott's Wave Principles on Indian Markets successfully since 2011 and made many accurate predictions. He is also the author of book "Practical Application of Elliott's Wave Principles by Deepak Kumar"

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